While DORA applies to all financial entities, the regulation recognizes that smaller institutions require proportionate approaches. This guide explains how microenterprises and small firms can achieve compliance efficiently.

Understanding Proportionality

DORA explicitly allows for proportionate application based on:

  • Size of the institution
  • Overall risk profile
  • Nature, scale, and complexity of services
  • Interconnection with other financial entities

Who Qualifies as a Small Entity?

Microenterprises

Under EU definition, microenterprises have:

  • Fewer than 10 employees
  • Annual turnover or balance sheet total not exceeding €2 million

Small Firms

Small entities typically have:

  • Fewer than 50 employees
  • Annual turnover or balance sheet not exceeding €10 million

Simplified ICT Risk Management

Streamlined Requirements

Small entities can implement simplified frameworks:

  • Governance: Designated ICT risk owner (may be part-time role)
  • Documentation: Proportionate policies and procedures
  • Risk Assessment: Simplified risk register focusing on critical risks
  • Testing: Basic vulnerability assessments instead of TLPT

Practical Implementation Steps

  1. Appoint ICT Risk Owner: Designate someone (could be CEO or CFO)
  2. Document Critical Assets: List essential systems and data
  3. Basic Risk Assessment: Identify top 5-10 ICT risks
  4. Essential Controls: Implement baseline security measures
  5. Simple BCP: Document recovery procedures for critical systems

Incident Reporting - Simplified Approach

Focus on Major Incidents

Small entities should:

  • Define clear incident classification criteria
  • Establish simple notification procedures
  • Use templates for reporting
  • Maintain incident log for internal tracking

Leveraging External Support

Consider outsourcing:

  • 24/7 monitoring to managed security service providers (MSSPs)
  • Incident response support
  • Compliance reporting assistance

Third-Party Risk Management

Simplified Due Diligence

For small entities with limited resources:

  • Use standard questionnaires for vendor assessment
  • Rely on vendor certifications (ISO 27001, SOC 2)
  • Focus intensive review on critical providers only
  • Use industry-standard contract templates

Managing Critical Cloud Providers

For major cloud services:

  • Review provider compliance documentation
  • Ensure standard contract includes DORA clauses
  • Monitor service status dashboards
  • Maintain backup and recovery procedures

Testing Requirements

Proportionate Testing Program

Small entities can implement:

  • Annual Vulnerability Scans: Using automated tools
  • Basic Penetration Testing: Every 2-3 years
  • BCP Testing: Annual tabletop exercises
  • Backup Testing: Quarterly restoration tests

Exemptions from TLPT

Most small entities are exempt from advanced TLPT requirements, focusing instead on:

  • Standard security testing
  • Configuration reviews
  • Access control audits

Cost-Effective Compliance Strategies

Leverage Free and Low-Cost Tools

  • Open-source security tools (OSSEC, Snort)
  • Free vulnerability scanners
  • Cloud-native security features
  • Automated compliance checklist tools

Outsourcing vs In-House

Consider outsourcing:

Function In-House Outsource
Basic IT Support ✓
Security Monitoring ✓
Compliance Consulting ✓
Penetration Testing ✓
Day-to-day Operations ✓

Industry Collaboration

Leverage Industry Associations

Many industry groups offer:

  • Shared compliance templates and tools
  • Collective purchasing for services
  • Training and workshops
  • Peer learning forums

Sharing Best Practices

Participate in:

  • Information sharing arrangements
  • Industry working groups
  • Cyber threat intelligence communities

Practical Timeline for Small Entities

Months 1-2: Foundation

  • Appoint ICT risk owner
  • Inventory critical systems
  • Conduct gap analysis using templates

Months 3-4: Implementation

  • Implement essential security controls
  • Document policies and procedures
  • Review third-party contracts

Months 5-6: Testing and Refinement

  • Conduct initial vulnerability assessment
  • Test backup and recovery
  • Train staff on procedures
  • Finalize documentation

Common Challenges and Solutions

Limited Resources

Challenge: Small teams wearing multiple hats

Solution: Leverage automation, outsourcing, and templates

Budget Constraints

Challenge: Limited funds for compliance investments

Solution: Prioritize critical controls, use free tools, seek industry collaboration

Technical Expertise

Challenge: Lack of in-house cybersecurity expertise

Solution: Engage external advisors, attend training, join peer groups

Essential Documentation Checklist

Minimum documentation for small entities:

  • ICT risk management policy (simplified)
  • Critical asset inventory
  • Top risks register
  • Incident response procedure
  • Business continuity plan
  • Third-party service provider register
  • Evidence of testing activities
  • Training records

Ongoing Compliance

Annual Review Cycle

  • Q1: Review and update risk assessment
  • Q2: Conduct security testing
  • Q3: Review third-party arrangements
  • Q4: BCP testing and documentation update

Stay Informed

  • Monitor regulatory updates
  • Attend industry events
  • Subscribe to security advisories
  • Maintain awareness of emerging threats